Yesterday, March 31st, the judge in Kaplan v. Saint Peter's Healthcare System ruled that Saint Peter's pension plan is not a church plan under ERISA as a matter of law, and denied the hospital's motion to dismiss the case. Judge Michael A. Shipp issued the ruling with a lengthy Memorandum Opinion which we are in the process of digesting. In the meantime, the always reliable Thomas E. Clark Jr. at FRA PlanTools has a blog entry summarizing the developments.
The ruling negates the IRS's August 2013 private letter ruling that the Saint Peter's plan is a church plan. It essentially agrees with, and we would say bolsters, the similar recent ruling in the related Dignity Health case in California. Litigation is not complete in either case, but as in the Dignity case, the essence of the Saint Peter's case has been decided by this ruling. We do not know whether Saint Peter's might make changes to the management of the pension plan in the near term. We don't know if they can stand pat until the completion of the case, or afterwards pending an appeal. We do know they can no longer claim that the Saint Peter's plan is a church plan.
Heartfelt congratulations to Larry Kaplan, who took on this burden on behalf of all the Plan members; the law firms arguing the case for the plaintiffs, led by Karen Handorf at Cohen Milstein; and to the members of the Saint Peter's pension plan, those still working and those now retired, whose victory this is. More soon.
The management of Saint Peter's University Hospital is using the church to exempt itself from the Federal safeguards that protect your retirement plan. For an introduction, see Your Pension At Risk.
